The Catholic University of America

Response to Questions of the CUA Director of Conferences and Summer Programs by Thomas Arden Roha, Roha and Flaherty

The University's Director of Conferences and Summer Programs has submitted a series of questions dated February 7, 2001. We will repeat the questions below and offer responses.

Question: "If Housing and Residential Services makes available excess space in residence halls to non-CUA interns during the Academic Year, is this taxable and at what rate."

Answer: Yes. The tax rate would be 14.5%.

Question: "During the summer we make available campus facilities to the following:

"CUA Students

"Non-CUA student interns

"CUA departments for co-curricular activities

"Groups external to the University with CUA departmental co-sponsorship

"Groups external to the University

"Nonprofit groups

"Government agencies

"Other educational institutions (elementary, high schools, universities)"

Answer: In making the campus facilities available, we assume that the facilities are dormitory space and that a rental fee is charged.

The Federal or District of Columbia government are exempt from the District of Columbia sales tax.[1] Thus, rentals to Federal and District of Columbia government agencies would be exempt from the sales tax.

If the nonprofit groups have a Certificate of Exemption from the District of Columbia government, and the facilities are paid for by the group (not the individuals), then no tax is to be charged. Care should be exercised to assure that the dates on the Certificate of Exemption covers the rental period. The University should make a copy of the group's Certificate of Exemption and keep it with the records of that group's rental; this documentation should be kept for a period of the statute of limitations, i.e., five years.

If the group or individual to whom the University is leasing accommodations can produce Certificate of Resale, meaning that they will, themselves, lease the room to others, then no sales tax need be collected by the University.

All other individuals having the right to stay in the University's dormitories for a period of 90 days or less are subject to the 14.5% sales tax under a strict reading of the statute. As noted above, the University may wish to adopt a more lenient standard.

Question: "CUA students may contract for housing regardless of whether they are enrolled in summer course work. Housing charges for CUA students are always processed through student accounts. Is this taxable and at what rate?"

Answer: Under a strict reading of the D.C. sales tax law, if students have a right to occupy University housing for ninety (90)days or less, they are subject to the 14.5% sales tax on their rental.

Question: "They may contract for meals. This charge is posted to their student account. Is this taxable and at what rate?"

Answer: Meals and food served to students by semipublic institutions like the University are exempt from the sales tax. Nonetheless, is a "student" a "student" during that period when he or she is not taking classes? Neither the statute nor the regulations define "student" for purposes of this exemption. It would, in our view, be appropriate for the University to adopt the view that the individuals are students if they were enrolled before the break and express an intent to return after the break, and the break is of limited duration, i.e., less than 90 days.

However, if under the University's contract with Sodexho-Marriott, it is Sodexho-Marriott that is selling the meals and food to the students, sales tax would apply and should be collected.

Question: "They may rent a refrigerator? This charge is posted to their student account. Is this taxable and at what rate?"

Answer: Yes. Leases and rentals of tangible personal property are subject to the District of Columbia sales tax at the current rate of 5.75%.[2]

Question: "They may contract for additional phone features (voice mail, etc.) or computer connection. This charge is posted to their student account. Is this taxable and at what rate?"

Answer: Local telephone service is subject to the D.C. sales tax. Local telephone service is defined to include access to a local telephone system and "any facility or service provided in connection with" such access.[3] Toll telephone service and private communication service is not subject to the tax. The rate of tax on local telephone service is 5.75%.

Question: "They may purchase a laundry card (to operate laundry machines owned and serviced by Caldwell and Gregory under a contract with CUA). CSP collects this money directly from the student. Is this taxable and at what rate?"

Answer: While laundry services are generally subject to the D.C. sales tax, an exception exists for services performed by means of self-service, coin-operated equipment.[4] Is the self service equipment operated, not by coin, but by a laundry card, nonetheless, coin operated for purpose of the exemption? While it is certainly arguable that laundry service purchased by way of a laundry card is not taxable, no statutory provision, regulation, or court case speaks to this issue. The spirit of the exemption would appear satisfied with the use of a laundry card.

Does the agreement with Caldwell and Gregory include a provision dealing with which party has responsibility for sales tax, if assessed? If taxable, it would be taxable at 5.75%.

Question: "Persons not CUA students may individually contract for summer housing. The vast majority of these persons are non-CUA students completing a DC based or area internship (most likely on Capitol Hill) but may also include students and nonstudents for purposes of internships or employment in politics, law, law enforcement, media, advocacy, research, etc. We have adopted several policies to differentiate ourselves from a hotel including a seven night minimum stay and by signing our contract they are affirming that they have an educational purpose for their stay. Housing and charges for other services for these persons is collected directly by CSP. Are housing charges, meal plan, refrigerator rental, phone features, computer connection, and laundry cards taxable and at what rate?"

Answer: For housing charges, yes, the charges for such individuals, assuming they have the right to occupy University housing for ninety (90) days or less, are taxable at 14.5%. For the meal plan, while these individuals are students, they are not students at the University and thus it would be our view that such meals are subject to the 10% on food and drink sold for immediate consumption. For refrigerator rental, phone features, computer connection and laundry cards, please see our discussion in response to previous questions.

The D.C. Regs. include language quoted above and at fn. 16 indicating that Congressional staff are exempt from the sales tax on their lodging. Who actually constitute Congressional staff is not defined in the D.C. Regs. or elsewhere, but it would be reasonable for the University to argue that Congressional interns are, in fact, Congressional staff since they serve on the staff of Members of Congress. Although the language of the exemption may be inconsistent with the statute, as noted above, and thus may be invalid, if the University were audited and assessed sales tax on University housing leased to Congressional interns, the language of the regulations could be used to argue that such an assessment is invalid.

Question: "University facilities are available for rental from groups internal and external to the university as well as external groups co-sponsored by a university department or school. These groups can contract for lodging (available only during the summer), meeting space (classroom space not utilized by academic use), and dining or catering arranged through Sodexho-Marriott, the university's contracted food service provider. Audio-visual equipment can also be rented (either university owned equipment or additional equipment arranged for from outside vendors). Meeting space used for a strictly internal group, meaning a function entirely organized by a department or school and in accordance with that department or school's mission, is available at no cost. Examples are Archives Institute, Experiences in Architecture. If these uses occur during the summer and the department or school contracts for lodging, they receive a $6/person night discount on lodging. No discount on dining or catering is available because it is provided by an outside contractor. No discount on audio-visual equipment is given. Are any of these charges taxable and if so at what rate?"

Answer: If the group has a Certificate of Exemption and contracts for the space or service itself, no sales tax would be due. The University should make a photocopy of the Certificate of Exemption, assure that it applies for the period at issue, and keep it with the file of the group's stay. Care should be exercised to assure that the housing, food or services are purchased by the group, and not by the individual members of the group. In addition, if the group has a Certificate of Resale, sales tax in that situation would not be charged.

If the group does not have a Certificate of Exemption or Certificate of Resale, or the lodging, food or services are being purchased by individuals rather than the group, a strict reading of the District of Columbia sales tax law indicates that individuals who have the right to occupy the lodging for a period of ninety (90) days or less would be subject to the sales tax and the rate would be 14.5%. Meeting space is not subject to the sales tax. Dining if provided by the University to students would be exempt from the sales tax, but, if provided by Sodexho-Marriott would be subject to the sales tax (since the meals would not be provided by the University) and the rate of tax would be 10%. Audio-visual equipment rental would be subject to the sales tax at the 5.75% rate.

Question: "If the user is a group external to the university, it must pay published rental fees for meeting space and lodging as well as dining and catering and audio-visual equipment. External groups are required to make payment of 25% deposit, provided certificate of liability insurance and pay balance of estimated costs 7 days prior to the start of the event. Are any of these charges taxable and if so at what rate?"

Answer: If the external group would have a Certificate of Exemption or a Certificate of Resale, and the lodging is paid for by the group, no sales tax would apply. If the group does not have a Certificate of Exemption or Certificate of Resale, the rental of University housing with a right to occupy the housing for ninety (90) days or less would be taxable at 14.5% rate. Meeting space would not be taxable. Audio-visual rental would be taxable at 5.75%. Catering, unless the University is providing the food and those consuming are students, would be taxable at 10%.

Question: "Some of these groups are non-profits (schools and other universities, associations, advocacy groups, etc. and are both DC and elsewhere based), are charges assessed to such groups taxable and if so at what rate?"

Answer: If the group has a Certificate of Exemption or a Certificate of Resale and the payment is made by the group, no sales tax would be chargeable. If the group does not have a Certificate of Exemption or a Certificate of Resale, or if the payment is made by the members of the group rather than the group itself, then see the answer to the previous question.

Question: "Some external groups are government agencies or departments. In the past these have mostly been DC or US government agencies or departments. Are any charges assessed to government agencies or departments taxable and if so what rate? What if they are not DC or US government?"

Answer: The District of Columbia sales tax law grants exemption to sales to the United States or the District of Columbia or any instrumentality thereof. Sales to other states are similarly tax exempt if that other state grants a reciprocal tax exemption to the District of Columbia.[5]

Question: "If the user is a group external to the university but the purpose of the event is in accordance with the mission of a university department or school that department or school can act as co-sponsor. There is a published co-sponsorship policy and the chair or dean of the department or school must write letter to CSP stating that the purpose of the event is in accordance of the mission of the department or school. Because a university department or school furthers its mission by acting as co-sponsor, the external group organizing the event receives a 50% discount on meeting space and $6/person/night discount on lodging. No discount on dining, catering or audio-visual equipment is given. All other requirements of an external group are required, including payment of 25% deposit, certificate of liability insurance and payment of estimated costs 7 days prior to the start of the event."

Answer: A strict reading of the District of Columbia sales tax law indicates that lodging of such group would be subject to the 14.5% sales tax unless the group has a Certificate of Exemption or a Certificate of Resale and the lodging is paid for by the group rather than by the individuals attending the event. Meeting space would not be subject to the sales tax. Dining, if provided by the University to students of the University would not be subject to the District of Columbia sales tax but if provided by Sodexho-Marriott would be subject to tax at the rate of 10%.



[1] D.C. Code §47-2005(1).

[2] D.C. Code §47-2001(n), 47-2201(a)(1)(D). D.C. Regs., §461.

[3] D.C. Code §47-2001(n)(1)(G)(i).

[4] D.C. Code §47-2001(n)(1)(K), 47-2201 (a)(1)(I).

[5] D.C. Code §47-2005(1)-(2).


Page checked August 5th, 2010, FJL.